AUSTIN LAZ PLC MOVES NEARER PROFIT.

Austin Laz PLC though still dreaming of the year it will record N500m revenue, at least now hopes to quit the loss league if not this year, then the next, all things being equal.

According to the figures for the half year to June released recently, turnover increased almost fourfold to N130m from N37.3m for 2015 first half. And more importantly, no cost head came close to the same growth rate.

Cost of sale more than doubled to N149.9m just like distribution cost which closed 100.6% higher at N6.38m.

Also administration cost increased by 47.7% to N14.1m thus helping distribution cost to drive Austin Laz into higher operating loss of N40.4m compared to N37m by the same time in 2015.

Cost of sale growth was engendered mainly by strong increase in factory cost; and distribution expenses was driven as hard by most components especially discounts, advertising, PR and entertainment.

However, even though all these recorded increases at rate lower than revenue growth, the real game changer was 81.6% drop in finance charges to N1.33m despite increase in short term borrowing.

Thus, Austin Laz PLC ended the half year with only N41.8m loss as against N44.2m loss previously.

Should the significant drop in finance cost continue in the second half, the company will be very close to profitable year.

This will be easier if a thing or two can be done to reduce cost growth further behind revenue increase

AUSTIN LAZ PLC: Nm half year
                         2016.         2015
Revenue.        130.0.         37.3
Cost of sale   149.9.         61.6
Gross profit.  (19.9).        (24.3)
Administration 14.1.        9.54
Distribution       6.38.       3.18
Finance cost    1.33.       7.24
Profit b4 tax   (41.7).     (44.2)
Short term debt 30.7.     2.75
Working cap.    509.4.    424.8

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